Employees Provident Fund and Employees Social Security Fund

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Bit of a long shot but maybe someone could advice me on this.

I have just received the contract for a job working for a UK company in Malaysia. I will be working through a Regional Office.
In the contract there is the following clause "The Parties shall contribute to the Employees Provident Fund (EPF/KWSP) and Employees Social Security Fund (Socso/Perkeso) at the prevailing statutory rates. The latter shall only apply if the Employee has previously been making contributions or; if not, elects to do so now. The Employee’s Salary shall also be subject to the appropriate taxes."

My understanding was that as a "foreigner" I was not subject to the EPF and ESSF. Can someone please confirm this.

Also as an "ex-pat" what benefits would there be if I was to take part. What are the employee/employer contributions

Thanks for your help

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hi,

Exact circumstances depend on age and employment status. Are you classed as a foreign worker because foreign workers do not need to contribute. But foreign workers can choose to join.

Employee contribution is 8%. Employer contribution is, err, 12% I think.
You get a yearly dividend which is more than the interest on an FD. It fluctuates yearly but is now about 5.5%.

If you join is your employer going to contribute the 12% (not sure on the amount) free gratis or simply take it off your monthly salary. Plus that's 8% of your monthly salary going into a scheme where withdrawal is lengthy and procedural, and you don't get easy access to it.

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Hi OM,

PricewaterhouseCoopers recommends that you take it:

22. The Employees Provident Fund is essentially a savings scheme to provide for employees in their old age. All employers are required by law to make monthly contributions to the Fund for their employees. Expatriate employees are exempt from contributions to the Fund. Since there are certain tax benefits to be gained from contributing to the Fund, it is recommended that expatriate employees should consider becoming a member of the Fund.

Their eTax Virtual Library is a great source of public information. You might also find their quick reference guide, 2009-2010 [pdf] outlining Malaysian tax legislation and other business information informative.

Regards.